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How a smart grid transactive energy system could benefit buildings

Jan. 28, 2022
A new study by Pacific Northwest National Laboratory reveals the viability of transactive energy coordination in the smart electric power grid for a range of scenarios that could impact the building and electrical sectors.

A recent simulation of a transactive energy system conducted by Pacific Northwest National Laboratory (PNNL) researchers demonstrates the potential economic benefits of the U.S. employing a flexible, smart electric power grid, ready to drive the electrical, building and transportation sectors with clean renewable energy.

According to PNNL:

The simulation showed that if a transactive energy system were deployed on the Electric Reliability Council of Texas (ERCOT) grid, peak loads would be reduced by 9 to 15 percent.

That savings could translate to economic benefits of up to $5 billion annually in Texas alone, or up to $50 billion annually if deployed across the entire continental United States. The savings would [also] equal the annual output of 180 coal-fired power plants nationally.

But, as noted by PNNL, a transactive energy system has never been deployed on a large scale, "and there are a lot of unknowns."

To investigate, the U.S. Department of Energy’s Office of Electricity summoned the transactive energy experts at PNNL to investigate how such a system might work in practice. Hayden Reeve, a PNNL transactive energy expert and technical advisor, led a team of engineers, economists and programmers who designed and executed the study.

Reeve explained, “Because Texas’s grid is quite representative of the nation’s energy system, it not only enabled the modeling and simulation of transactive concepts but provided a reliable extrapolation of the results and potential economic impacts to the broader United States grid and customers.”

Such flexible control over energy supply and use patterns is called “transactive” because it relies on an agreement between consumers and utilities.

PNNL notes that that, "in a transactive energy system, the power grid, homes, commercial buildings, electric appliances and charging stations are in constant contact. Smart devices receive a forecast of energy prices at various times of day and develop a strategy to meet consumer preferences while reducing cost and overall electricity demand. One key component to this strategy is adoption of smart appliances and load controls. These dynamic resources can learn how to consume energy more efficiently, adjusting their use for brief periods to free up electricity for other needs," added the laboratory.

As further pointed out by a PNNL media statement:

"The study's findings indicate that a transactive energy system would reduce daily load swings by 20 to 44 percent. And as more electric vehicles come into use, the study, perhaps counterintuitively, showed that smart vehicle charging stations provide even larger electric peak load reductions because they offer additional flexibility in scheduled charging times and power consumption."

For the study, Texas’s primary power grid (ERCOT) provided the basis for PNNL’s analysis. Researchers created highly detailed models that represented the ERCOT power network, including more than 100 power generation sources and 40 different utilities operating on the transmission system. The analysis also included detailed representations of 60,000 homes and businesses, as well as their energy-consuming appliances.

Researchers used the models to conduct multiple simulations under various renewable energy generation scenarios. Each simulation demonstrated how the energy system would react to the addition of differing amounts of intermittent power sources, such as wind and solar.

The research team also developed a detailed economic model to understand the yearly cost impacts for operators and customers. Finally, it looked at upfront costs associated with labor and software expenses, as well as the costs for buying and installing smart devices in homes and businesses.

“A smart grid can act as a shock absorber, balancing out mismatches between supply and demand,” Reeve explained. “Through our study, we sought to understand just how valuable effective coordination of the electric grid could be to the nation, utilities and customers. Working with commercial building owners and consumers to automatically adjust energy usage represents a practical, win-win step towards the decarbonization of the electrical, building and transportation sectors without compromising the comfort and safety of participating homes and businesses.”

Recently released, the study's final multivolume report is here.

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